Today on our 3rd Panel of CBM 2021, we are going to hear experts discuss hot topics and talking about both sides of the table. So excited to hear these great insights again. Let’s tune in.
Topics Covered in this Episode
Do you already have an eCommerce website(s)? (A chance to promote their business).
Can you describe the trends for the next five years that will influence your industry?
What have you noticed in the acquisition space in Amazon / ecommerce in the past year?
Why do you think there is this consolidation?
For sellers – what should they consider when deciding to buy or scale their business?
Does this mean (all these acquisitions / consolidation) it is too late to start a new brand / start a new amazon fba business?
People / Companies / Resources Mentioned in this Episode
√ CBM May 2021
√ CBM September 2021
√ GFA announcing it is diving in to the FBA aggregator space
√ Davide’s VIP Page
√ Luciano’s VIP Page
√ John’s VIP Page
√ Andy’s VIP Page
√ Ken’s VIP Page
√ Christina’s VIP Page
√ Visit our GFA partner – Mercury – for US banking solutons for your ecommerce businesss
Episode Length 57:40
This has been an awesome episode. We appreciate the great insights and thanks everybody for listening!
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[00:00:00] All right. Episode 354 of Global From Asia. Hot topic. All these Amazon acquisitions and aggregators. Ready for this, Jan? Yes. Ready for this Mike. Welcome to the Global from Asia podcast, where the daunting process of running an international business is broken down into straight up actionable advice. And now your host, Michael Michelini. Podcast 354.
[00:00:31] We’re talking about the third panel of the CBM, our first ever online CBM. Buy, sell, scale – Consolidation in the E-commerce and FBA World. What are the big Amazon sellers doing in today’s market? Consolidation and roll ups. We’re going to hear about experts discussing the hot topics and talking about both sides of the table.
[00:00:57] So I’m so excited to listen to this session again. I think, I forgot some of the great insights. But it’s great to be able to do the podcast and talk about these great things again, you know, for a refresher. Yeah, it’s exciting. I know, it was the third one, Jan. It’s late at night. I don’t know about you.
[00:01:25] I’m a morning person. And at night I was dead. I think I was on my, I was drinking. I was drinking then like Qingdao beer. I don’t ever drink either, but I had to loosen up a little. It was, it was an intense one, but this was a really fascinating conversation. We had some great experts in the Amazon space to talk about aggregation.
[00:01:48] We had, we had actually some really good people. Do, do you want to remind us who’s on this panel. Yeah. Yeah. We have these people in other panels too, like one and two. Right now we have Davide Nicolucci, Luciano Drehmer, John Cavendish, Andy Lee and Ken Huynh. Yeah, there you go. Yeah, that’s great. And then we had some good insights, you know, like, should you sell your business now?
[00:02:15] Like, what are some trends that are happening? What’s the future? Why are these, why are all these people buying all these companies and businesses? And I think I was popping in a little bit too. And I think after this, the panel recording, I can share with you, Jan and the other is about some things that are happening with what I’m doing in the Amazon acquisition space.
[00:02:36] We also made a video, a special announcement at globalfromasia.com/broker about some of what we’ve been doing in the Amazon acquisition space here at GFA and in the consulting things that I’m doing. So you can check that video out too. But I think for now, I think let’s hop into this panel and check it out.
[00:02:56] What do you think, Jan? Yeah, let’s check it out, Mike. Let’s do it. Okay. And before we get into the panel, we have one of our amazing GFA partners, sponsors, Jan, who we got up next? Yeah. We have Travis Price from Mercury. Although they have been our partner for a long, with a year-long sponsorship and a partner of ours. So that you’ll hear from Travis.
[00:03:19] I think he’s going to be on for about five minutes to 10 minutes. And he was up super early. I think it was 5 or 6:00 AM in the West Coast, US. So thanks for that, Travis. And he also shares some of his insights of his own e-commerce experience. So that’s great. Let’s, let’s do it. And, everybody pay special attention to Travis.
[00:03:37] He got up bright and early for us. So, Travis is heading e-commerce growth at Mercury bank. And he’s, you know, they’re a happy supporter of the community, Global from Asia and this event. And we also, I also use them personally for our Amazon business and for a US bank that’s connected to my Amazon FBA.
[00:03:58] It, luckily it helped me cause I had a non-American partner, so I wouldn’t have been able to get a normal US bank without going into the U S myself. So, so thank you for that, Travis and Mercury. Do you want to give a little intro before we get into the panel? Yeah, for sure. So thank you. That was a great intro.
[00:04:17] So my name’s Travis. I am leading our e-commerce efforts at Mercury bank. Mercury is a bank built specifically for startups, online businesses, e-commerce businesses. So we are a hundred percent online, US banking service. What’s unique about us, one big thing that’s unique about us is that we’re extremely foreign founder friendly.
[00:04:42] So a lot of the incumbent banks in the states will not touch non-US citizens, you know, no social security, no social security number. We don’t care about any of that. Like as long as you have a great business and you’re legitimate and you’re, you know, you’re not on some fraud or money laundering list, so we’re happy to bank you.
[00:05:01] The only caveat being, you will need a US entity to bank it with mercury. So Wyoming, you know, Delaware are popular places to incorporate, if you don’t have one already. A little background on me though is I started in e-commerce in 2015. I invented a product called Santa’s flask, which became a number one bestseller on Amazon.
[00:05:22] It was, or it is still, I guess. It’s called like the wine stocking. And so it’s like, imagine in, you know, these, these wine bags, I don’t know if you’ve seen them. Like in Australia or the states, you know, I just made one in the shape of a Christmas stocking and patented it and it went like crazy viral and we ended up yeah.
[00:05:43] Being the number one bestseller in our category for five years in a row on Amazon barware category. I sold that business, went on to work for wish.com for two years, managing a growth team. Sort of on new initiatives and we built out what’s called the Wish local program, which is a local brick and mortar retail program where we partner with local stores around the world, and then customers can go into the store to pick up their product.
[00:06:08] So it was sort of Wish’s answer to Amazon FBA. You know, they’re like we don’t have all this capital to build these warehouses. Let’s just like, try to find some space somewhere through partnerships. So, that program is doing really well. And I’m very proud to have been a part of it. So if you guys ever have any questions about Wish, selling on Wish, I think that’s sort of a black hole for a lot of merchants.
[00:06:30] And so definitely hit me up and I’m happy to help in that regard. That’s sort of my spiel. I also sell Amazon FBA right now. I’m launching a new brand in the e-bike category. I’m just like addicted to PPC and Amazon. And, my goal is to scale that to the point where I can sell it to one of these aggregators that, you know, all these aggregators are popping up everywhere, looking to acquire solid, you know, Amazon brands and businesses.
[00:07:00] But I think I’m going over time. So I need to go back to mercury cause, cause that’s why I’m being, I’m being paid to be here by my boss. So yeah, basically, you know, our whole, our whole ethos was that banking for businesses has broken the traditional incumbents. Wells Fargo, Bank of America, et cetera, have been slow to adopt technologies, that technology, and to understand the needs of today’s current, you know, online entrepreneur, online business owner.
[00:07:32] So we built, we built a bank from, from the ground up. Our founders in X, Y Combinator, judge, or investor. And he’s he’s. Sorry, I’ve been sold a few startups. So he, he sort of knew what he was doing, which is good. Anyways, our product offers full fully fledged FBIC, insured US business, bank accounts, checking and savings accounts, virtual debit cards that you can create up to 30 of them per person, use them for Facebook ad spend Amazon spend, et cetera.
[00:08:01] We have very low to zero fees. So typically our only fees are for wire transfers, but if you’re a big enough customer with us, even those are waived. Everything, like I said, can be done from your phone. We have amazing customer support and just the, the bank fee itself. And the account itself is 10 X better than anything you’ve seen with the bank.
[00:08:23] And I can say that honestly, because I switched from Wells Fargo from my, my e-comm business. And it’s been incredible. Yeah, let me know if you have any questions, feel free to hit me up to email@example.com and we can give you guys a special deal for being GFA. Yeah. Mike, I don’t know if you have anything else to add there.
[00:08:44] I mean, I think it’s pretty clear and we have a lot, a lot of amazing content to share, but I think that’s, that’s already helpful. I mean, I hope people can get it. I’m so happy that, you know, when I heard about Mercury, I knew it was a great fit for the community here because we have a lot of, you know, of course in Asia, China, foreigners, cross border businesses.
[00:09:03] And a lot of us are always getting our banks shut down, banks, you know, honestly, I just, I just got a letter from HSBC. I got to fill out more forms and audits and it’s horrible. So, you know, honestly, I’ve had a really good experience with Mercury. Been about, I think I’ve been using it now for about 8, 8, 9 months.
[00:09:20] Super easy. And there’s no application fee. I mean, Even if you have a bank account, right. It’s like, why not just get a second one? I mean, of course. And I bet you they’ll switch to yours anyways, but I mean, there’s no, there’s no nothing really to sell. It’s like there’s no monthly fee, no application fee.
[00:09:35] It’s all online virtual debit cards, you know, like it just seems like a no-brainer. So. Catherine has a question, it’s a perfect question. Thanks Catherine. You know, it’s not for US citizens. I mean, you can, as you get it, but in any new bank. We do bank US citizens. But if we will bank any, you know, entrepreneur all over the world, as long as you have a US entity we’ll bank you.
[00:10:03] Yeah. So, so we obviously do U S companies with us too. Yes. Mike, I think the connection was lost, but the one, one last thing I just wanted to say that you touched on it. It was like, am I still here? Our idea of that around Mercury is to just build the product so good that you don’t need to talk to anyone.
[00:10:22] You don’t need to do any paperwork. So we’re, we’re really trying to think about, you know, what’s wrong with banking. How do we fix it? And what other products and services can we build for e-commerce companies specifically? So it will be coming out with some lending products, credit cards, you know, stuff like that in the future.
[00:10:39] Yeah, excited to support everyone here. And, Ino is one of your clients. Ino’s great, he’s in our community too. So he’s a happy Mercury customer. And, but yeah, I think, I think that’s, you know, 10 months now. Great. Thanks Ino. I really appreciate you waking up early and sharing with us.
[00:10:56] So I hope some people can reach out to you, Travis@mercury.com or DM you here. And I think we’ll move forward with the panel, unless there’s any other last things you’d like to add. I’m good, bye.
[00:11:08] All right. Well, anyway, I think it’s time to move to the panel anyway. Thank you, Travis. Okay, so, so let’s get into the main conversation. Now it’s Amazon acquisitions and we have a great lineup here. And just before we start, it’s it’s one thing that I’m, I’m a, I’m a new consultant. BizDev for Amazon acquisitions firm.
[00:11:32] BBG, Berlin Brand Group. And I would love to talk to you guys also about buying, buying businesses. So if you all want to talk to me too, we can do that as well as others on this call. So I just want to make sure I give that announcement. It’s my first time to publicly say that. So, let’s hear from the others today.
[00:11:49] So Ken, you’re in New York city, right? Or New York state. I am New York city, New York city. I just actually moved from Brooklyn to, uh, yeah. Yeah.It’s almost seven years now at this point, but I guess I’ll just kind of go into a quick intro of who I am and I guess why I’m here. Yeah. So my name’s Ken, I guess you could say serial founders, over 20 years.
[00:12:11] Now. This is a cross-section of tech CPG, and e-commerce, had a big company called Virtustream in 2016, focus more on cloud. I’m here because me and my partner, Paul run a firm called Trinovation Services and we actually support, FBA acquirers, Amazon stores with highly skilled, specialized human capital and back office operations.
[00:12:32] So excuse me. Or, and, and scale it back off the services across the value chain from emanation, for due diligence, customer service, customer satisfaction, logistics, FBA management, essentially. And we kind of sit in between both the sellers and also the acquirers. So we kind of see the traffic and sort of the sentiment across the different kind of players in the marketplace.
[00:12:53] So that’s kind of, kind of my perspective here, at least. So hopefully that helps. Thanks. Yeah, we had a great call about a week ago too, and I hope there’s more synergies for us and others on the, in the community. I see, I see Christina here. I don’t, she was on video and I don’t see if her video is still on.
[00:13:14] Maybe it’s just my connection. Christina, do you want to introduce, oh hi. Hi guys. Sorry. I encounter a lot of technical problems. Sorry about that. Maybe we’ll move on to Davide. Davide, o you want to give an intro? I think she’s back. She’s back, Mike, just speaking right now. Okay. Yeah. Introduce yourself, Christina.
[00:13:36] Thank you. I’ll have another sip of my beer. It’s super stressful for me. Yeah. Okay. Thank you. Hi guys. I’m Christina and I have been helping brands and retailers to go internationally. So in my past experience, I helped the consumer electronic products, the mostly sorted brands to go to. So Amazon or using their DTC channels to sell their products to overseas.
[00:14:03] And currently I’m helping international brands to get into China through the marketplaces such as Tmall global and jd.com. Yeah. I’m quite happy to be here today. Thank you. Thank you. Yeah. Yup. Christina, I’ve known her for many, many years. She’s been so great in the community and I’m happy to have for today.
[00:14:28] Thank you, Christina. Okay. Thank you. Davide. All right. So yeah, my name is David. I am founder of Growth Hack Consulting. It’s a seller that helps, it’s an agency that helps Amazon sellers. Yeah. It’s kind of late here, you know, after a full day of working at, woke up at eight and it’s May 20 almost here, but here we are.
[00:14:50] So thanks for having me here. So we have Amazon sellers to pretty much succeed on Amazon in any marketplace. I’ve been a speaker at, so, you know, Cross Border Summit and Matchmakers in the Boston years. So I’ve known Mike for a couple of years. Right now we work in some projects together. Yeah, I should be working also in the Amazon FBA acquisition industry together, we do consulting.
[00:15:14] We are helping to develop the business in the China side for probably the number two player right now in this industry. But this industry is, is booming right now. So there’s a huge amount of money that is invested, that is on the table. And it’s the super hot thing right now. I have personally done some research before for a couple of months.
[00:15:32] I talked with pretty much the biggest players, but I see new other players popping up every, every month, every week, because it’s super hot right now. So if you’re an Amazon seller, you’re doing good. You have a small team. You want to scale. You’re thinking about, you’re thinking about selling your business.
[00:15:47] This is definitely the right time. And you’re definitely in the, so right now is the time. And, I have been from one to 10 years. Our agency, we have been helping sellers from all across the world, from China, from the US, from Europe, we have, in sales. So yeah, this is pretty much my story, a little summary of what I do, who I am, so very glad to be here and to answer your questions and talk about anything that I can contribute with.
[00:16:17] Thank you, Davide. Thank you so much. John? We’d love to hear from you again for those that may have missed you on the last panel, which was awesome. You did great insights. Do you wanna just give a quick intro again? Sure. Yeah. I’m John Cavendish from Seller Candy. We help Amazon sellers to take care of their
[00:16:32] Amazon seller central. So basically any argument that you’ve been having with seller central, we will take it off your hands. We will do anything apart from creative work. So we will raise cases. We’ll get reimbursements. We will unsuppressed listings for you. We will push updates through. We’ll basically take anything, any conversation and accelerate it and just take off your hands so that you have an absolute expert doing the stuff inside Amazon seller central for you rather than having to do it.
[00:16:57] Yeah. So, you know, the aim is that you just give our staff the outcome and they will communicate with you, but we’’ll just get it done. You don’t need to explain it. It’s not about having a VA. You just get the results that you want to get with a team of super smart people. And as I said before, Mike’s, Mike’s got us as well.
[00:17:14] I I’m like everybody’s customer here, man.
[00:17:20] Oh, you are too great. Yeah. I didn’t know that. So it’s, it’s really great, John. Yeah. You always give good info. Rose, do you want to try it again? I have been in the e-commerce business circle in the past five years from Amazon to supply store business. I’m building different kinds of brands with my business.
[00:17:38] And also on the facilitator for a cross-border business. Awesome. Yeah. Rose has been in our community for many, many years, helping a lot with the, you know, helping a lot with our foreigners coming to China. You know, and, and really bridging Chinese events and Chinese sellers with the foreign, community too.
[00:17:57] So really thank you, Rose. It’s great to have you with us on the panel. Andy Lee, Andy is still with us. Andy is in a quarantine in Taiwan. You want to give us a little intro again? Well, my name is Andy, get to see some more cool friends like Davide. Hello. Of course, thank you Mike for inviting me for this event. I’m a consultant and also Amazon seller, e-based seller, shopify, you find something I also do coaching in Southeast Asia.
[00:18:27] It comes off Amazon and also local platforms like Shopee, Shopify. And this, I try as well. So we are mainly based in Hong Kong and also in Taiwan. So I’m now in Taiwan. My situation now is quite bad. As a matter of fact, after my quarantine tomorrow, I will fly back to Singapore already. have to cancel events. It’s actually, I’m near to the expressway.
[00:18:55] I can hear too many ambulance every day. So many ambulance almost as well as the local
[00:19:09] So that’s wow. You get out of quarantine and then you go back to Singapore. That’s crazy, man.
[00:19:19] For the month of may, I spent my life in a hotel room. Unbelievable. Yeah, we can do I get to enjoy myself.
[00:19:32] All righty. Well, thanks again for coming on and sharing with us and Luciano is back again. Luciano, you want to give us a real quick intro and then we’ll get into some, I think we’ve got everybody. Thanks Mike for inviting me again. And I’m Luciano and I’m a co-founder of Be Kind, health and beauty’s a haircare product brand.
[00:19:52] We mostly, I would not say I’m an Amazon seller. I would say like I’m a brand owner, right. And Amazon is our main sales channel for that. And I’m living in Shenzhen in the last years and happy to help with any questions you guys may have. It’s a pleasure to be here. Okay. Sure. Let’s, let’s move right into questions.
[00:20:13] I’m going to paste in the chat as well, in case there’s connection issues. You know, I think we’ve kind of already gotten it from the intros, some of the intros, but you know, like I just said, I’m, I’m starting to work with the acquisitions company. Again, a lot of people here are working with acquisitions companies.
[00:20:32] It’s a huge trend now. So what is, what is that, you know, what is, what is, what does that mean to you? What have you noticed? Maybe? I don’t know. Ken, you’ve been you’re you kind of even working with acquisitions companies is your client, right? Like there’s that many acquisitions companies now that you have like a whole service to this acquisitions company.
[00:20:57] Yeah, indeed. And just for a little context for folks that haven’t kind of gone back in history, roll ups have been around for quite a long time. There actually have been many famous ones that we actually know by name, but have realized they’re actually just acquisitions when you said buy up fragmented businesses, essentially.
[00:21:15] So it gives me my blockbuster back in the 99, 99, 2 thousands period. Right. If you remember, you could rent a video set, you know, Just, you know, those, those are companies that are trying to get economies, use a scale and what better industry to get a climate of scale than a highly fragmented business. So it just needs to be retail and commerce.
[00:21:34] Right. So, yeah, I mean, I think, I think the short of it is that there’s a tremendous opportunity to get a computer the scale, and so race to get as much capital as possible and to buy as many sort of long tail companies. Right. And so if you guys remember there was a guy, a Harvard professor named Chris Anderson, wrote a book called The Long Tail.
[00:21:51] In fact, And the idea is that there’s many, many categories of, of niches and the internet just kind of expanded that pie, tremendously huge access to customers, and you can advertise and then reach customers in many, many different ways. And so what they’re, what the acquirers are seeing is that there’s this there’s this there’s opportunities to sort of dominate certain niches.
[00:22:13] If you think about a slivers along a curve like this, right? So at that per part of the curve and the long part of it. If you just dominate one or two of those slivers and start looking at adjacencies, that becomes a tremendous opportunity to get because she was cash flows. So from an FDA acquirer perspective, it’s just, you know, kind of a no brainer.
[00:22:33] The question is, since there’s so much cash out there so much capital who can actually acquire the bachelors and require and into the most economic, the most of the, so that’s at least kind of the top level view my perspective. I don’t know if that’s possible. That helps me for sure. Yeah. Cause there’s definitely a lot of money going into the space, right?
[00:22:53] I mean, if you look at the charts, there’s investors pumping money into all these different funds. I think the real war, the real, the real, like you said, finding the acquisitions, getting the deal flow seems to be the real secret sauce or the real, the real way to make it succeed. But Davide, do you have some insights you’ve been working with some acquisitions companies.
[00:23:15] In a space for a long time in Amazon, what, what would you say you’ve been seeing? Yeah, as Ken was saying, I mean, yeah, we all agree. There is a lot of money being invested, you know, coming into this, into this kind of business right now. Thrasio, more than a billion US dollar, I believe right now, 1.7.
[00:23:36] They’re going on IPO. I learned that just a few days ago. I’m not sure when the date of the IPO is going to be, but there’s going to be the first of this kind of company to go public. And this is really opening our eyes and also tries to, it was the fastest company to recently. You’re only going to status in the, in the history of the United States companies.
[00:23:55] That, that’s what I believe. That’s what I heard. And this is, this is incredible, you know, and it. How, you know, the e-commerce businesses just booming. I think after the ignition that was given by the COVID-19 crisis. Now we are unleashing the potential. And I remember how right after COVID-19 hit all yeah.
[00:24:17] Amazon sellers where, you know, unstable and now it’s just growing. It was actually a kind of way to weed out the weak sellers let’s say, or those that weren’t performing too well or that had some problems. And now it’s kind of consolidating. So it’s, it’s even bigger and better. There is more money. There is more people actually buying it.
[00:24:36] From my side. I can tell you that the culture of buying a line is changing because we always focused in the U S and in China where e-commerce is very much present in everyday life of the people. But I can tell you a, me being Italian and coming from Europe, not all people, I used to buy things online.
[00:24:55] There was no Amazon agencies. There were, we had no competition because we have also now a branch in Italy and we have no competition. We weren’t even promoting that. So, so much until a year ago. And now, you know, a lot of Amazon going south on scheme in Italy, a lot of companies are trying to reach out to see whether they, whether it is actually good for them to invest on Amazon.
[00:25:17] And some of them, they still don’t understand the potential. They see Amazon. Bad, the evil, you know, they don’t know what Amazon, what e-commerce is. And so we are evolving. We are changing for sure. We’re not at the level of China and Asian countries. For example, I was interviewing Andy directly. And for example, life settling has been a thing, as we know.
[00:25:40] You know, we have all been in China somehow for a few years in China and also in Southeast Asia now as being coming in on Amazon scenes the end of last year. And it’s wow. The big thing. So everyone is talking about Amazon lie, or I think doc influencers. Well in my agency, we have made so muchcontent about this, but it’s mainly in China and in Southeast Asia for so long.
[00:26:04] Also people like selling on Facebook without having a store. So this is, this is incredible. And you know, this acquiring Amazon FBA business, I think, I think this is the nature of the evolution of where the e-commerce is going. Just getting things more and more serious. So. We see the, the, actually the enterprises, the companies, the big whales now putting their before then money into this, into this flow.
[00:26:29] And we see this kind of, I can, I can say that first, first person, because I’m working for some acquisition companies, that there is a war right now in actually hiring the best talent. Out there that might be in the U S in China to help them scale the business, to help them get the sellers that they want to onboard the right people and to develop the business better and better.
[00:26:51] Maybe Andy, you want to add something to this? Well, as a matter of fact, um, I just received a wee chat message just about a few hours ago. My account, my account manager for more. You said she doesn’t like to pick that up. And he told me that there’s a lot people going to the trend out for Amazon to the other girls.
[00:27:14] So what happened is we see a lot like selling is really easy and a sales can be much, much higher than compared to their sales in their online store. Or even there are. But the main issue or main thing that I believe is going to be the trend. Number one trend that’s going forward is that this last quarter, why not?
[00:27:41] Is it Amazon? Is it eBay? Whichever e-commerce platform, the person who is going to make the most sales and made the most money. It’s not about the thing. It’s where are you going to launch this thing? The logistics will be the key to write up. This coming last call thateveryone takes. Thanks guys. I really appreciate these insights.
[00:28:03] Yeah. I mean, we were ahead of the curve, right. But now it’s it’s been, there’s going to be a lot of people in this space, but I liked what Davide said too. It’s like weeded out. I got scared. Honestly. I think a lot of us got scared when I went home. And warehouses are closed and everything, and it didn’t change a lot, but Rose, what are you noticing in this space?
[00:28:24] You know, you’re, you’re in Shenzhen, you’ll go to a lot of seller events in China. Like what, what kind of things are you noticing in the industry? I think most of us know about, heard about the event happened in May 10th, Amazon suspended multiple Chinese sellers with revenue over 1 billion. Right. But that’s a big, issue in the inner circle.
[00:28:46] So I think what that would change in the M&A business, is more companies will be a lot more careful when they do the due diligence while occurring, especially Chinese sellers. So right now I see the chance that people, or some company they are going into acquire like small com some more Amazon companies that would about a hundred thousand or 20,000 in revenue a month, a year.
[00:29:14] Sorry, which means. New company there’s only six months or one month, with highly great potential. Okay. Thanks. Thanks for that. Rose. I’ll keep going. Sorry. If you have more, I didn’t mean to stop. I’m just saying this said that event happened early. This month would affect the way foreign capitals acquire Chinese Amazon business, you know, in terms of due diligence, because as we are not a lot of Chinese.
[00:29:44] Many of them. When it started the company, I started the business, a lot of the black hat, white hat. So that’s like a potential bomb. Yeah. I, I mean, guys, I was, I’ve been working with Amazon sellers since [00:30:00] 2014 and I can relate, I started working with one of the, at that time it was top five Amazon seller in the world.
[00:30:07] So it was one of the top sellers from China and also one. Global sellers, somebody tech and in 2014, I mean, we still have the opportunity to do in hindsight incentivized reviews. And I remember there was a time of anchor, you know, com competing with somebody tag with the, without key. And then I started working directly with Darcie as an external consultant in 2016, actually, even before launching my agency.
[00:30:32] And I remember. Okay. It was suspended. I don’t know if they’re already back on or not. Maybe you guys can tell me this kind of thing has been going on for awhile. So we all know that. And I definitely think that what Rose said is really important because China is very, very appealing as a marketplace to go and shop Amazon FBA businesses.
[00:30:55] So all this, yeah. Kind of companies that want to acquire Amazon FBA businesses like Thrasio, like all the others, they invest a big part of their budget into China. And the due diligence as Rose was saying, is something really, really important. And now that this thing, once again happened now, everyone is scared as, as they should be.
[00:31:15] Because of course it’s like reminding us. They get a look at what is going on here. We, we all know something. What is going on? I’ve been personally talking about black ads for so long. I was speaking also at. You know, the Global from Asia goes forward to some mates at the global sources I made for, you know, for Amazon sellers regarding black ad, more than once we wrote.
[00:31:38] And we interviewed a lot of people about this thing. So it is a thing. And I think, you know, the businesses, they really want to be careful, but still it doesn’t stop them. And I, I heard actually that, I mean, I know as a matter of fact, Until a couple of months ago, no one was able to directly acquire a business in China.
[00:31:55] And I think that probably the due diligence was also one of the most important factors that was delaying this, this acquisition process. And I know that it already happened by at least two or three of the companies that are, you know, doing this, this kind of business right now. So it is very, very important.
[00:32:14] Okay. Thank you, Davide. Thank you so much. I think. A question for sellers is when do they decide to sell, you know, to sell out to these acquisitions companies? Or should they grow, you know, should they keep building, um, what are some thought processes? You know, there’s all these companies like, even they can talk to me now I’ll buy their business, Davide, you know, can, I’m sure there’s others in this event that would love to buy some sellers.
[00:32:39] How does the seller decide? Should they sell or should they grow or change? For me or Jan or whoever, I think both would love to hear both of your insights, but whoever. Well, I really liked this question because I personally, what I want you to hear more insights from, from the other peers about it.
[00:33:00] Especially from Davide because I, I’m not sure hold it off. Offer an Amazon company. And soon as Rose said, brutally recently, a lot of Chinese companies, Amazon accounts were shut down. Right? And now we have this situation where, where. The market is trying to understand, is it safe to invest in an Amazon business or not?
[00:33:29] And I figured a moment like that might not be the best moment from my perspective to just sell your business, right? Because you still need to understand what’s going on with the market. Then as a numbers of seller, your, your ver you rely a lot. And, and Amazon as a, as a marketplace, as a sales channel, because Amazon.
[00:33:52] For, for a seller, they can decide they can decide anything overnight. So, so this is, this is, this is our, my 2cents, but I really would like to, to hear more from other fields as well, because I’m also very interested in the topic. And you’ve sold your, you sold, you sold a business before I believe, right.
[00:34:11] Or, and you’ve worked with sellers that have sold. There’s been a lot, a lot of activity. And you work with a lot of sellers, Seller Candy. What would you, you know, what do you notice? You know, what do you hear at the, at the bars, drinking tea, drinking? What are you here? You can chatter. Yeah. So yeah, it’s pretty interesting.
[00:34:30] Isn’t it? Because as sellers, I look a lot at, at business for sale and I think, you know, this guy’s milked it for all he’s worth. Who’s going to buy this business. I’m sure you guys also see that when you look at a broker sites and you’re like, wow, this, this business seems to be pretty much optimized and then aggregate it comes out.
[00:34:48] And the realization that I had is that I was talking to my friends about this and they’re like, yeah, the market’s so hot that people have money. I’m just looking for any way of getting returned. And that’s, you know, assigned to the market’s super over here and, you know, FBA businesses, even if they stay stable, have incredible returns.
[00:35:05] Now, if you get it for Forex, you get 25% a year. And if you’re an aggregator, you’re not gonna get Forex when you flip your aggregator or if you go public now, it’s actually, I was going about what an insane return, a hundred forex return probably on profit. So they don’t care as long as you’re not, it’s not going to collapse and that your business is growing.
[00:35:25] They just seem to be, you know, they’re just aggregating that raising money, the founders are going to make money. I don’t know if I personally don’t know if the company is ever going to. Turn out to be some crazy unicorn because it’s just Amazon business, isn’t it. But I think it’s really interesting and I’m super interested to see where it goes.
[00:35:45] Ken, what do you think overheated? You know, is it multiples? You know, what, what are your thoughts? You, you work with a lot of acquisitions companies and yeah, I guess you can look at it from an acquire standpoint. Essentially. They’re looking for steady cash flows, solid a bit. And some trajectory like some trajectory and maybe, maybe it’s not, you know, five, 10% year over year or quarter over quarter.
[00:36:09] It’s something like five, you know, one or 2% when it’s said, and for them as I think it was John that said these roll ups are, you know, at the end of the day, the, the, if you think about like stacking blocks, right? When you stack a block and you’ve got a cash flow stream and you just keep acquiring and layering more and more sellers.
[00:36:29] At some point you reached this critical mass, right. And that’s what is going through right now. That’s why they’re able to go to the public markets. And getting your, you know, over $1 billion valuation. So I would say, um, overheating might be kind of a strong term at the moment, mainly because the, the market size is so, so big and it’s expanded.
[00:36:52] I mean, Tectonic shift that we just went through that the public consumer behaviors globally, not just in the U S and north America and Asia, and then the other developing markets. Also the behavior shift to e-commerce buying things online. The comfort level has shifted tremendously, and that may be indelible that may not change dramatically after we go back to some level of normals.
[00:37:14] For them, they may, they may feel like they’re getting ahead of the curve there. They’re also acquiring economies of scale, really growing and trying to dominate certain niches or sort of categories. And then maybe the end game is Maine. You may not, it may not just be simply an IPO and maybe they spin it off.
[00:37:31] They go private. There’s a lot of things when you have steady cash flow for my investment banking. Yeah. One is perspective to take advantage of, right? Yeah. That’s great. Ken, a little bit of my, my insights in the space too, is if you look at the bigger, as higher multiples, so if you buy a lot of smaller sellers, you usually pay a lower premium.
[00:37:55] And then if you become bigger, you’re safer investment to an investor. So you can charge a higher premium. So you’re making, you’re making that spread as an acquisitions company. So you’re buying. Four to five times yearly earnings. I think that’s the going rate right now? 3, 2, 3, 2 is low three, four or five, but they’re, they’re, they’re raising money at much higher multiples.
[00:38:21] And they’re hoping to IPO at even like, I don’t know, but actually it was probably like what 13, 30 or something like that. And so I think that’s the whole game, right? So those small sellers rolling them up, you become a bigger seller. You get cheaper access to capital. You get cheaper rates on shipping.
[00:38:39] Like John is talking here. I hope I say your name correctly bigger is kind of better in a way, you know, smaller, smaller is getting harder. I don’t like to be a hater. You know, I, I love startups and entrepreneurs, but. I think a harder, like earlier in panels panel one logistics costs, you know, you know, all of this, all these challenges makes it harder for everybody, but it makes it more costly for the smaller people.
[00:39:06] So that’s, that’s the game, right? That’s that’s the game. So, you know, unfortunately I think consolidation is going to continue to, to happen in the space for these reasons. I haven’t heard much from Christina, I guess maybe she’s a little more into China, but Christina, do you have any insights you’d like to just your, you, you studied overseas, you came back to China, your work with e-commerce both ways.
[00:39:29] Do you have any insights that you’ve, you’ve seen if you’d like to give some insights? Yeah, thank you, Michael, because I have been on both sides of the business, so I see the difference, but I see Amazon and becoming like marketplaces, focusing on the branding very much. And especially for the acquisition company.
[00:39:50] And some of the companies that I contact waste, they are actually interesting buying the business that are more, I mean, developing into brands. So they might not just I’m buying like the whole business. They, they invest a little bit on the, on some part of the business or, or they just more like a tool to help the sellers to becoming a brand.
[00:40:16] And it’s more similar to what. I like the business in the, let’s say in the Tmall global, because some of them are investor the venture companies that are contact waste. They are interesting. I say, getting the sellers from overseas into the China markets and helping them to develop, develop into brands. So I, I believe that in the future, Amazon will also, I mean, the sellers in Amazon will go into the same way as well.
[00:40:47] Okay, thanks for that insight, Christina. And how’s, how’s the, how are we doing on time or road as you have? I saw you say something you wrote, you have something to stay, I guess, acquisition business, and a lot of the companies that are entering this market, I think they are buying and also establishing their own account and not these two, uh, two types of different ways to operate the best.
[00:41:15] I mean, they in parallel bring somebody with by business. That’s 101 millions, a million, 10 hour, and the same time, they would also either build something on launching your product and buying by the smart account to build a business, a quarter business. I’m gonna show you that. Do you get one? I mean, I, I mean company, they also launch product on yeah.
[00:41:45] They buy business and also grow the business on their own launch new products in the same brands in that current brand. And if you talk about the portfolio, not the business had of the volume is a quiet business. And on the other side, they also have a team she launched, brought up on their own, so they don’t have to buy everything.
[00:42:07] Yeah. So I think, yeah, it goes back to the scaling to really scale your business. You have a team, so you’re adding another portfolio, another brands, another group of ASINs. And then you could launch because it’s true. Like sometimes the current stat, current seller doesn’t have that team to launch new products or the capital to launch new product so they could buy that company.
[00:42:29] And then give him some, there’s some jokes coming into Kansas making me laugh here. But yeah, I agree. Like once you, I think that, that’s what I try to say in our, our company, you know, I’m really happy with, Camille’s stepping up here and Jan and our community. Once you have a good team, right? You can really scale.
[00:42:48] So if you’re scaling and growing, you can acquire others launch products on that brand with your current team. You’re not adding more costs, right. You’re just growing. Growing products and then using your core team to scale. I think that’s what you, that’s how I would say what you’ve mentioned, right? Oh, yes.
[00:43:09] Correct. Correct. Awesome. When, when companies acquire business, they still have to have a good operation team to handle all the business at the same time to launch business in terms of cost. I want to add something here. This is actually the, the, the business model that has been working very, very well for a lot of big Chinese brands.
[00:43:34] If a guys, you know, pay attention to this today, history, for example, some valley and K and, uh, even big brands like anchor and let’s, let’s do the example of our K for example, because we mentioned them before they were suspect. But they did. I mean, no one can say differently. They did huge business on Amazon.
[00:43:52] They are a multi-million dollar company, billion dollar company globally. I still have friends who work in out gate. They ratesomething like 100 different brands. Now I don’t know the exact number, but when I was working for them, for them as consultants. So I was going to their office pretty much every other day.
[00:44:09] And that was in 2017, had around. 20 to 30 brands. And then until last year they keep growing the brands. So this was actual even before companies like came to this business. So we see that actually consolidating and putting a lot of different brands. Enter the same basket into this main company concept actually works because you use the logistics together, you kind of use similar marketing strategies.
[00:44:39] You count on the, you know, we were saying before that the logistic is very important right now, if you win on the logistics, you’re pretty much win on Amazon. And this is, this is right. You know, also because a lot of other three PLs service providers, Companies that offer a service to help you do FBM better because FBA is much harder to do right now.
[00:44:58] This is really the key to your success. And that must be because you could do the best in the world, but if you can not ship as many products as you want to sell, you’re done. So you need to have a, you know, a different kind of center for strategy. So this has been the strategy of brand of companies Ikea, and they were developing brands in many different categories.
[00:45:19] They have, for example, ICAK in the kitchen and they had Ikea with power banks, they have NYPA, with electronic massagers that I was personally following. And now they’re also jumping into the same business as Thrasio. They’re going to buy Amazon FBA businesses in China. And I think that probably for some kind of cultural, you know, reasons, they might be a lot successful.
[00:45:41] So because they have a lot of money, so definitely, you know, The big fish thinks the small fish and most of the crates, the small fish is inside. This is the kind of strategy that actually has been working already before companies like enter the market and is actually showing to be, to continuously work, work in this kind of, you know, and this kind of business in the e-commerce in general.
[00:46:03] It actually makes a lot of sense. Awesome. All right. Thank you for sharing your insights. Yeah. We can continue the sharing of insights during the round tables, which we are about to switch to. All right. So there was our panel three. This is a third and final panel from the may 2021 first ever, like you said, online, cross-border matchmaker, CBM.
[00:46:31] Also everybody save the date. Jan, do we, I’m not afraid to say the exact dates, but I think that we have dates for the next. Yeah, I think we have agreed on September 17, but this time we are doing it twice during September 17. So it’s going to be 7:00 AM to 11:00 AM and 6:00 PM to 10:00 PM. But that could change, you know, you know, things are right now, they’re constantly changing things.
[00:47:03] This is going to be the final. So, you know, one of the feedbacks we collected was it wasn’t we, you know, I guess it’s the, one of the advantages. We have people really all around the world in the community. So time zone is tough. So some will be maybe not the best time for, for some people in certain parts of the world, but some will be, so we thought we would do
[00:47:28] two maybe US and Asia time. And like Europe, Asia time friendly, of course, people can stay up at any time in the night or day and come to both. But we thought that might be a good test for this second online CBM, right. This way we’re going to cover the three major time zones, the Asia, the Americas and Europe.
[00:47:50] So if you guys think otherwise, of course, you can let us know that we can adjust the time. As early as now, so that we don’t keep changing the specifics of the CBM, but I think this one will do Mike, right. I think it’ll work. I mean, also thinking to leave the room open even between the sessions, I think we use air meet and we could let the rooms be open for networking, even in between the two sessions.
[00:48:18] We’ve noticed that we’ve, we’ve done this with others. Other projects where we left it open and people kind of just could hop in and make a, maybe at their booth or their tables. Cause it has a networking. So maybe we’ll just leave it open and then people could, maybe even we could do some special surprises.
[00:48:34] Pop up a session inside in the middle, maybe what will be? Yeah, I think, I think, you know, me Jan and us, we, well, we try to listen, you know, we could just stay the same, but I think we keep on improving, trying to improve and listen. So let’s see how this one goes. And then I think I said at the beginning, I’ll share even with you Jan and others about what’s been happening.
[00:48:57] Yeah, I think you’ve said you’ve noticed that Jan. Like Mike you’re so busy, late, more busy than I’m always busy, but you’re like, you’re so much busier. So I thought I could share some of the things I’ve been doing and learning about in the Amazon acquisition space. Yeah, I would like to hear more about that.
[00:49:13] I think that’s a very hot topic right now. You know, there’s businesses that they keep buying. They keep buying Amazon sellers and so any great insights from your mic, I think might greatly impact our listeners. So you want to share your thoughts. I picked up some insights at the panel that there are too.
[00:49:35] And, you know, I think people got some insights already from that, but I just, maybe even since the panel happened, I’ve been even deeper into this. Like I said, at the beginning, there’s global commission.com/broker. So we’re having sellers in our community, our network, our membership, talking to us, asking. I, you know, that’s what we do.
[00:49:56] We know people right here, so many years school from Asia andmyself personally, we know people in this space. So the Chinese sellers are a little bit new to this. I mean, I think my biggest feedback is Chinese sellers never plan to sell their business. Whereas Western or foreign or international sellers.
[00:50:19] I guess the word is digital nomad. Do you know that word Jan, if you heard of the digital nomad before
[00:50:28] digital nomads are they’re traveling online business people. A lot of our, I think our community would maybe fall under that. Although right now with COVID lockdown, there’s not much traveling, but so these kinds of sellers. More easy to sell their business, or at least it’s not, they’re a little bit more flexible.
[00:50:49] Whereas Chinese sellers, they are not like building this to sell it and do another one. Dairy are more like doing it. As a longterm. And I think they’re mainn exit, is called an exit strategy. Exit strategy is like, what do you, what’s your end goal with the business? So, exit strategy could be a lifelong like business.
[00:51:08] Like actually, why I think we’re trying to do here is hopefully a life sounds scary, but it could be just for longterm cashflow for, you know, for the team and for the owners and, et cetera. The others could be like a flip, you know, a flip is where it’s like, I build it and I, or I buy it, I fix it. I sell it for more, like, even on houses, people talk about that, you know, you buy a house, you fix it, you sell it.
[00:51:31] And then some people want to go all the way to like IPOs. Like initial public offering, which means going on a stock exchange andindividual investors buying like shares of your company. And if you can believe that you, a lot of Chinese sellers are going for IPO, you know, or of course like, or a huge, a huge exits, a huge acquisition when they’re really, really big.
[00:51:52] So a lot of these sellers in China are not used to someone wanting to buy their business. So one big thing is we have to educate them. Why, why, why sell? Or why does somebody even want to buy it? And one of the tricky things is they can’t do not. If they do sell, they can’t have, they can’t do it again.
[00:52:15] Not they can’t, if I’m going to sell these, this just fell off. Like if I sell these online on Amazon, it’s Globe. And then I sell this to an investor or another company. I can’t start another branding say, this is, you know, before it was Mike’s Globes. Now it’s Jan’s globes.com or whatever. So you have to sign a non-compete.
[00:52:36] So I think the one thing is they have to really not compete if they sell. So we’re just trying to educate them about, about this. And it’s, you know, the other thing is, I don’t know if I said it on the podcast or even to you, but I’ve been trying to get back to Shenzhen. I’m in Shenyang. People wonder where that is. But they are a few hours from each other, you know, I think you can imagine business anywhere, but especially China businesses, a lot of face to face.
[00:53:00]You know, you can imagine, especially buying somebody’s company. So I’m trying to get there so that I could do some smaller events, you know, for our community and the introductions. Maybe some dinners, some, some workshops to, to educate them. But yeah, I mean, I think there’s a lot more education and the other one is they just to get the valuation of your business.
[00:53:23] Usually you have to give more information, but I don’t think it’s just Chinese seller. I think any seller is like, well, how. How much are you going to give me if I sell? And they’re like, we have to say, well, you got to give us your financials, your product details. Obviously you have to trust us a lot.
[00:53:38] Right? They have to tell you a lot, not a lot, but at least some basic information, like the products, the sales. So we’ve been noticing, like they have to trust us and they have to sign like NDA. So some of my experiences is of course they need to trust. I mean, of course even I. You build a brand, even in China, we have Wechat accounts.
[00:53:59] And, but of course there, there are somewhat hesitant or slower to like sign a NDA and send in like their sales and their product information, you know, listings stuff. So we are getting close on some deals. You know, these don’t happen, obviously doesn’t it, it happened like right away. We’ve only been doing this like a couple, couple of months and with at least for me, so we’ll, you know, hopefully we’ll convert some in.
[00:54:24] Next month or two, but somewhere I’ve gotten past the contract have been sending in their information, going through due diligence. And my last part that I’ll add is I kind of want them to publicly say that they. So we could use that as a testimonial or as a case study, right? Jan, like a lot of times to get in other people you show whether it’s a service company or a product company or a acquisition, you want to show your cases.
[00:54:52] Right. But I think, I think who really, not, not even just Chinese, but especially people don’t want to be so public that they got million dollars to sell their company right. And put their face on the internet, you know? So I don’t know if Chinese seller is going to be willing to say that. Publicly, you know, cause they kind of want to, especially a Chinese sellers are more secretive, but I think all sellers are a little bit secretive about what they do, what their product is.
[00:55:19] So that’s just some stuff I’ve been learning, but hopefully, hopefully we got a couple of big sellers and that’s one of the advantages we have at GFA. Like one of them was our events in 2016 that cross-border summit. All right. And he heard we’re doing this and he approached us of course in we-chat and then he’s provided us a lot of the financials.
[00:55:38] And in the course is a pretty established Chinese seller. So, but again, it’s not fast and it’s a high, high, high volume business. So it’s, it will be a big one, but I have a feeling we might get it. It seems like it’s going to the next stage. So that’s some updates. Yeah, that’s great Mike, to hear about the progress of this project, they’ll be happy. But if someone wants to contact us, would you, would you mind giving them the email address that they can email so that we can assist them?
[00:56:12] Sure. I mean, I’m trying, like I said before recording. We’ll let’s let’s see if that Jan. Jan you’re, so you’re really super smart and you know, you’re, you’re learning about the community. I think we want to get you more involved anyway. So I think we’ll go to our group, email mailbox firstname.lastname@example.org.
[00:56:28] But I think Jan, you could help take that case or there’s actually a long form. But they probably don’t want to, it seems like they don’t want to fill out the form right away, probably they want to talk to us. So I think they could reach out probably by email or, or of course, if they’re on, we chat to talk to us, talk to you.
[00:56:43] I think, you know, that would probably be a first step and then learn a little bit about what they’re doing. Actually, if they look at globalfromasia.com/broker, we put the kind of criteria we’re looking for. The different target sales and, and industries and markets and things like that. So you can also understand more, but, but yeah, I think talk to Jan. Jan’s great, right?
[00:57:03] Yeah. Thank you, Mike. I always pretty much know everything about the eamils that are coming to us. I usually reply to them. So yeah. Awesome. That’s it for today. Thanks. Thanks everybody for watching. Thank you. Thank you for having me again. To get more involved in running an international business, please visit our website at www.globalfromasia.com.
[00:57:31] That’s www.globalfromasia.com. Also be sure to subscribe to our iTunes feed. Thanks for tuning in.